Discussion · Government Orders
Jean-Denis Garon Bloc Québécois
“Equalization payments are meant to balance wealth between provinces. When the federal government invests in oil, oil-rich provinces get richer and Quebec depends even more on these payments. I want the member to explain how this is a trap.”
“Mr. Speaker, equalization is intended to level out disparities in fiscal capacity. For a fairly long time, Quebec’s ministry of finance used to publish what was known as the update on federal transfers. It revealed that almost the entire difference in fiscal capacity between the so-called “rich” and “poor” provinces could be traced back to non-renewable natural resources. What happens when federal money is invested in oil? The provinces that produce the most oil get rich, while Quebec grows even more dependent on equalization. I would like my colleague to explain for me how that can be a trap.”
Official Hansard
Mr. Speaker, equalization is intended to level out disparities in fiscal capacity. For a fairly long time, Quebec’s ministry of finance used to publish what was known as the update on federal transfers. It revealed that almost the entire difference in fiscal capacity between the so-called “rich” and “poor” provinces could be traced back to non-renewable natural resources. What happens when federal money is invested in oil? The provinces that produce the most oil get rich, while Quebec grows even more dependent on equalization. I would like my colleague to explain for me how that can be a trap.